Coast announces fourth-quarter and 1994 results, 32 percent nonperforming asset reduction and elimination of $1 billion of multifamily exposure.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Jan. 25, 1995--Coast Savings Financial Inc. (NYSE/PSE:CSA (1) (Canadian Standards Association, Toronto, Ontario, www.csa.ca) A standards-defining organization founded in 1919. It is involved in many industries, including electronics, communications and information technology. ), the holding company of Coast Federal Bank, FSB (FrontSide Bus) See system bus. FSB - front side bus , Wednesday Wednesday: see week. reported a net loss of $6.5 million, or 35 cents per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the year ended Dec. 31, 1994. The loss for the year reflects the pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern , earthquake-related provision of $15 million during the first quarter (or 46 cents per fully diluted share) and pretax charges of $16.4 million during the fourth quarter (or 51 cents per fully diluted share) related to the company's exercise of its option to eliminate recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. liability for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1 billion of multifamily credits in pools guaranteed by the Federal National Mortgage Association. Net earnings were $17.2 million, or 94 cents per fully diluted share, for the year ended Dec. 31, 1993. The fourth-quarter charges resulted in a net loss of $4 million, or 22 cents per fully dilute di·lute v. To reduce a solution or mixture in concentration, quality, strength, or purity, as by adding water. adj. Thinned or weakened by diluting. share, for the three months ended Dec. 31, 1994, compared with net earnings of $3.7 million, or 20 cents per fully diluted share, for the fourth quarter of 1993. "We are very pleased with the sharp reduction in nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. and the elimination of approximately $1 billion of multifamily exposure," stated Ray Martin, chairman and chief executive officer. "This significant asset quality improvement, coupled with the emerging signs of a recovery in the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). economy, bodes well for continued progress with credit costs in 1995. As we look ahead, the company remains focused on improving asset quality and enhancing franchise value." Nonperforming assets (defined as the sum of nonaccrual loans, foreclosed real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most and modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. loans) were reduced to $141.9 million, or 1.74 percent of assets, at Dec. 31, 1994, compared with $209 million, or 2.57 percent of assets, and $220.2 million, or 2.72 percent of assets, at Sept. 30, 1994, and Dec. 31, 1993, respectively. The disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of approximately $1 billion of multifamily recourse liability eliminates future credit costs (loan and real estate writedowns and holding costs related to nonperforming assets), as well as the risk-based capital requirement Risk-Based Capital Requirement A stated requirement of liquid reserves placed upon banks and institutions that deal in risky ventures. Notes: These requirements exist for the protection of investors who hold an interest in these types of businesses. associated with these credits. The company is currently involved in a dispute with FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association regarding the contractual provisions of the former recourse liability arrangement and Coast's reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. claim for approximately $15 million of previously recorded credit losses. As of Dec. 31, 1994, Coast's tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. , core and risk-based capital ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. were 5.01 percent, 5.39 percent and 10.50 percent, respectively, each of which exceeded, on both a current and fully phased-in basis, the requirements specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the Office of Thrift thrift: see leadwort. Supervision's existing capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. for the year ended Dec. 31, 1994, were $1.9 billion, essentially all of which were one- to four-family adjustable rate mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. . At Dec. 31, 1994, Coast had 96 percent of its portfolio in adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. loans, and its one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants gap ratio -- a measure of interest rate exposure -- was a positive 6 percent. Reflecting the increase in market interest rates and the rapid increase in rates offered on retail deposits by Coast and its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , the reset lag inherent in the 11th District cost of funds index A Cost of Funds Index or COFI is a regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans. has widened, resulting in Coast's net interest rate spread -- the difference between the yield on interest-earning assets and the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities -- declining to 2.18 percent at Dec. 31, 1994, compared with 2.34 percent at Sept. 30, 1994, and to 2.49 percent at Dec. 31, 1993. Net interest income totaled $44.8 million for the latest quarter, compared with $47 million for the quarter ended Sept. 30, 1994, and $48.9 million recorded during the year-earlier period. General and administrative expenses were $39.8 million for the three months ended Dec. 31, 1994, compared with $40.8 million for the three-month period ended Dec. 31, 1993. The total of loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. fees and charges, retail banking fees and the recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. portion of other income from operations was $11.5 million for the three months ended Dec. 31, 1994, compared with $12.8 million recorded for the year-earlier quarter. As a result of the items summarized above, Coast's pretax core profitability (defined as net interest income before provision for loan losses less general and administrative expenses plus loan servicing fees and charges and the recurring portion of other income) was $16.6 million for the latest quarter, compared with $20.9 million for the three-month period ended Dec. 31, 1993. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was $375.2 million, or $20.33 per share, at Dec. 31, 1994. Tangible stockholders' equity was $363.7 million, or $19.71 per share, at the end of the latest quarter. Coast Savings Financial is the holding company of Coast Federal Bank. With assets of $8.2 billion, Coast is one of the nation's largest thrift institutions Thrift institution An organization formed as a depository for primarily consumer savings. Savings and loan associations and savings banks are thrift institutions. . Coast's primary emphasis is on residential real estate lending and retail banking provided through 92 retail banking offices located throughout California. -0-
Coast Savings Financial Inc. and Subsidiaries
Consolidated Financial Highlights
(Dollars in thousands)
(Unaudited)
Dec. 31,
1994 1993
Financial Condition
Assets
Cash and due from banks $ 99,578 $ 120,840
Investment securities 84,920 543,583
Loans receivable 5,793,182 5,007,196
Mortgage-backed securities 1,733,728 1,972,301
Real estate held for sale 44,168 100,721
Federal Home Loan Bank stock 79,261 63,888
Land and depreciable assets 87,493 77,566
Interest receivable and other assets 262,683 195,795
Goodwill 11,504 12,927
$ 8,196,517 $ 8,094,817
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 5,879,808 $ 5,908,559
Federal Home Loan Bank advances 954,450 704,200
Other borrowings 865,111 953,181
Income taxes 8,588 12,291
Other liabilities 113,346 123,018
7,821,303 7,701,249
Stockholders' equity:
Common stock 185 185
Additional paid-in capital 263,161 263,150
Unrealized gain (loss) on available-
for-sale securities (1,006) 10,821
Retained earnings 112,874 119,412
375,214 393,568
$ 8,196,517 $ 8,094,817
Regulatory Capital Ratios (in percent) Risk-based 10.50 pct. 10.95 pct. Core 5.39 pct. 5.95 pct. Tangible 5.01 pct. 5.20 pct. Weighted Average Interest Rates (in percent) Loans receivable and mortgage-backed securities 6.84 pct. 6.54 pct. Investment securities 5.18 pct. 3.29 pct. Interest-earning assets 6.80 pct. 6.28 pct. Deposits 4.15 pct. 3.65 pct. Borrowings 6.47 pct. 4.61 pct. Interest-bearing liabilities 4.62 pct. 3.79 pct. Net spread 2.18 pct. 2.49 pct. One-Year Gap (the cumulative difference between repricing assets and liabilities) to Total Assets 6 pct. 10 pct. -0-
Coast Savings Financial Inc. and Subsidiaries
Consolidated Financial Highlights
(Dollars in thousands except per-share amounts)
(Unaudited)
Three Months Ended
Dec. 31,
1994 1993
Operations
Interest income:
Loans and mortgage-backed securities $ 127,465 $ 119,198
Investment securities 5,390 3,125
132,855 122,323
Interest expense:
Deposits 59,213 55,708
Borrowings 28,806 17,687
88,019 73,395
Net interest income 44,836 48,928
Provision for loan losses (15,000) (12,000)
Net interest income after provision
for loan losses 29,836 36,928
Other income:
Loan servicing fees and charges 3,101 4,521
Gain (loss) on sale of assets (989) 630
Other (825) 8,236
1,287 13,387
Other expenses:
Operating expenses 39,825 40,806
Real estate operations, net 2,430 7,070
Amortization of goodwill 357 355
42,612 48,231
Earnings (loss) before income tax benefit (11,489) 2,084 Income tax benefit 7,497 1,590 Net earnings (loss) $ (3,992) $ 3,674 Fully diluted earnings (loss) per share of common stock (22 cents) 20 cents Shares of common stock outstanding at end of period -- --
Twelve Months Ended
Dec. 31,
1994 1993
Operations
Interest income:
Loans and mortgage-backed securities $ 475,705 $ 503,063
Investment securities 18,925 12,584
494,630 515,647
Interest expense:
Deposits 218,335 234,020
Borrowings 88,384 80,061
306,719 314,081
Net interest income 187,911 201,566
Provision for loan losses (75,000) (61,000)
Net interest income after provision
for loan losses 112,911 140,566
Other income:
Loan servicing fees and charges 15,231 19,155
Gain (loss) on sale of assets (711) 6,089
Other 28,404 35,049
42,924 60,293
Other expenses:
Operating expenses 160,278 160,950
Real estate operations, net 10,088 34,259
Amortization of goodwill 1,424 1,413
171,790 196,622
Earnings (loss) before income tax benefit (15,955) 4,237 Income tax benefit 9,417 12,999 Net earnings (loss) $ (6,538) $ 17,236 Fully diluted earnings (loss) per share of common stock (35 cents) 94 cents Shares of common stock outstanding at end of period 18,457,454 18,456,454 -0-
Coast Federal Bank, FSB
Nonperforming Assets
(Dollars in thousands)
Dec 31, Mar 31, Jun 30,
1992 1993 1993
Nonaccrual loans $ 156,655 $ 139,096 $ 129,590 Foreclosed real estate owned 160,756 167,656 122,513 Nonaccrual high-yield bonds 450 -- -- Modified loans/a 1,350 1,350 1,350 Nonperforming assets $ 319,211 $ 308,102 $ 253,453 General valuation allowance (GVA) $ 140,000 $ 135,000 $ 125,000 Total assets $8,351,826 $8,238,167 $8,326,125 Ratio of nonperforming assets to total assets 3.82 pct. 3.74 pct. 3.04 pct. Ratio of GVA to nonperforming assets 44 pct. 44 pct. 49 pct.
Sep 30, Dec 31, Mar 31, Jun 30,
1993 1993 1994 1994
Nonaccrual loans $ 124,641 $ 117,122 $ 133,490 $ 137,439 Foreclosed real estate owned 111,038 100,721 94,493 76,972 Nonaccrual high-yield bonds -- -- -- -- Modified loans/a 2,371 2,370 1,020 1,020 Nonperforming assets $ 238,050 $ 220,213 $ 229,003 $ 215,431 General valuation allowance (GVA) $ 125,000 $ 120,000 $ 130,000 $ 114,000 Total assets $8,141,162 $8,094,817 $8,004,331 $8,029,980 Ratio of nonperforming assets to total assets 2.92 pct. 2.72 pct. 2.86 pct. 2.68 pct. Ratio of GVA to nonperforming assets 53 pct. 54 pct. 57 pct. 53 pct.
Sep 30, Dec 31,
1994 1994
Nonaccrual loans $ 133,724 $ 96,713 Foreclosed real estate owned 74,219 44,168 Nonaccrual high-yield bonds -- -- Modified loans/a 1,020 1,020 Nonperforming assets $ 208,963 $ 141,901 General valuation allowance (GVA) $ 111,000 $ 85,000 Total assets $8,127,985 $8,196,517 Ratio of nonperforming assets to total assets 2.57 pct. 1.73 pct. Ratio of GVA to nonperforming assets 53 pct. 60 pct.
(a) Defined as loans whose terms have been modified such that the
interest rates charged to the borrowers have been reduced to
levels below the original contract rates and below market rates
of interest at both the time of modification and the reporting
date.
CONTACT: Coast Savings Financial Inc., Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Mark Neal/Priscilla Finch finch, common name for members of the Fringillidae, the largest family of birds (including over half the known species), found in most parts of the world except Australia. , 213/362-2134 |
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